CORIHUARMI GOLD MINE

Profile

Corihuarmi  is an open-pit gold mine located nearly 5,000 meters above sea level, in the Andes Mountains of central Peru. It is a challenging environment, and our highly-dedicated work force has consistently exceeded all the challenges.

 

The Corihuarmi gold mine was built for $20 million and the capital investment was recovered during its first year of production.Started production in March 2008 and up to March 2017 it has produced 280,184.46 ounces of gold.

 

The gold production is projected over 24,000 ounces for 2017, an average of 21,000 ounces per annum for the 3 year period through 2020.

 

The Company renewed its dump truck fleet (10 trucks) in the Corihuarmi mine through a $1.5 million lease, reducing operating costs and ensuring efficiency, safety and environmental care in the transportation of ore.

 

The Company work closely with community leaders to develop programs that have improved the local quality of life, such as providing specialized training for employment opportunities. We have helped local entrepreneurs create new businesses that provide most of the goods and services for our projects. We have substantially improved health and education services in communities within the direct and indirect areas of influence.

History

After acquiring the Corihuarmi prospect in 2002, we completed several drilling programs, an Environmental Impact Study (“EIS”) and a Feasibility Study for a conventional open-pit heap leach gold mining operation. By early 2007, we had all of the environmental approvals, construction permits and community agreements necessary to build the mine.

 

In the second quarter of 2007, we built the mine using the funds received from our initial public offering (“IPO”). Construction was completed on schedule in the first quarter of 2008 at a cost of about $20 million.

 

Corihuarmi is accessible from Lima by road, and close enough to the national electrical grid to connected to the mine site via a 44-kilometre long power line that was constructed by Minera IRL. Adequate water is also available.

 

Mining at Corihuarmi commenced at the higher grade Diana deposit and, in 2009, mining moved to the larger, lower grade Susan deposit. Mine operations were based upon an initial reserve of four million tonnes of ore grading 1.1 grams of gold per tonne of ore from the Susan and Diana deposits, containing about 145,000 ounces of gold.

 

During the first three years of production the Company progressively doubled the capacity of the mine’s facilities to process two million tonnes of ore per annum from both the Susan and Diana deposits, plus a significant amount of mineralized broken scree material below these deposits.

 

Ore is fed into a primary jaw crusher and is then stacked onto the heap leach pad. The coarsely crushed ore is treated with a dilute cyanide solution, which extracts the gold into a solution that is drained into ponds at the bottom of the heap. The gold is then extracted from the pregnant solution onto activated carbon and the barren solution is recirculated to the heap repeat the gold leaching process. Gold is produced on-site as doré bars, which are delivered to a refinery for final processing.

Geology

The Corihuarmi gold mine covers an area of 10,168.22 hectares and is host to an epithermal, high-sulphidation, and disseminated gold system. Gold mineralization is coincident with a large zone of hydrothermal alteration that covers most of the property. The gold is most often associated with silicic and advanced argillic alteration, which is typical of high-sulphidation, disseminated gold systems.

 

The Company recently announced the receipt of a National Instrument 43-101 compliant technical report for its Corihuarmi gold mine that reflects an increase in estimated gold reserves for a total of 98,928 ounces of gold and an extension of the life of mine (“LOM”) through December, 2020.

 

The reserves estimated are located in the lowest part of the productive seven small open pits, mainly in the areas of Diana Extension, Susan and Cayhua. The technical report was prepared by Andean Consulting Group SAC and includes information from the Company’s 2016 drilling campaign, which consisted of 56 diamond drill holes (5074.30 m) and 29 RC drill holes (2,199.00m).

 

An exploration drilling program is expected for the second half of 2018 to extend additional resources. Corihuarmi has licensed 9,000ha of mining concessions.

 

The Corihuarmi Mine Ore Reserves Estimation is under the supervision of Eng. Andres Rivera Zeballos, MAusIMM #305739. Eng. Andrés Rivera is a Geological Senior an independent Qualified Person (“QP”) as defined by the N.I. 43-101 and JORC Australian Code.

Community and Social

Minera IRL has a wide range of highly successful community programs, ranging from building health facilities to helping grow organic vegetables.

Among the hands-on programs are workshops for producing arts and crafts in various communities of direct and indirect influence. The Company organizes year-round health campaigns, which include comprehensive medical examinations.  Dental campaigns also take place in various rural communities, aimed at improving oral hygiene and general dental health.

Minera IRL also holds workshops and sets up pilot projects in order to improve agricultural output, including producing worm humus and raising guinea pigs and animal feed.  There are on-going veterinarian examinations of domestic animals, and treatments to combat parasites, infectious and vitamin deficiency diseases for farm animals such as goats, sheep, alpaca, llamas and dairy cattle.

The Company helps improve local infrastructure, for example irrigation and community works projects. There is on-going support for cultural activities, including for cooking and folkloric contests.

 

Every year in December, we hold a Christmas campaign in a number of communities, where we have entertainment for all and deliver toys to a large number of children and youths, as well as distributing hot chocolate and Christmas cake to families.